Braemar Hotels & Resorts Inc. - 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed on December 4, 2019, by Braemar Hotels & Resorts Inc. (BHR), a Maryland corporation. The filing reports material definitive agreements and amendments to the company's capital structure regarding its Series B Preferred Stock.
Key Financial Metrics and Capital Structure
- Series B Preferred Stock: The company authorized an additional 1,900,000 shares of Series B Preferred Stock. The total authorized and classified shares are now 7,100,000.
- Outstanding Shares: As of December 4, 2019, 4,965,850 shares of Series B Preferred Stock were issued and outstanding.
- ATM Program Capacity: The company established an "at-the-market" (ATM) equity distribution program to sell up to $40,000,000 of Series B Preferred Stock.
- Operating Partnership Units: An additional 1,900,000 preferred units were created in the Operating Partnership to mirror the economic rights of the new Series B Preferred Stock.
Material Changes
The filing details three primary changes executed on December 4, 2019:
- Amendment to Partnership Agreement: Amendment No. 3 to the Partnership Agreement was executed to create the additional 1,900,000 preferred units.
- Articles Supplementary: Filed to classify and designate the additional 1,900,000 shares of authorized, unissued Series B Preferred Stock.
- Equity Distribution Agreements: Entered into agreements with B. Riley FBR, Inc. and Janney Montgomery Scott LLC to facilitate the ATM Program.
Outlook, Management Commentary, and Risks
Use of Proceeds: The company intends to use net proceeds from the ATM Program for general corporate purposes, specifically including:
- Capital expenditure projects at the Ritz-Carlton Lake Tahoe.
- Repayment of debt or other maturing obligations.
- Financing future hotel-related investments.
- Redemption of outstanding preferred stock shares.
- Working capital and other capital expenditures.
Commission Structure: Sales agents will receive a commission not exceeding 2.0% of the gross sales price of shares sold.
Financial Data: This filing does not provide specific revenue, profit, cash flow, or margin figures. It focuses solely on capital structure modifications and financing arrangements.
Key Facts for Investor Verification
- Verify the current market price of Series B Preferred Stock (BHR-PB) to assess the potential dilution or capital raised under the $40 million ATM program.
- Confirm the specific timeline and budget for the Ritz-Carlton Lake Tahoe capital expenditure project mentioned as a use of proceeds.
- Review the full text of the Equity Distribution Agreements (Exhibit 1.1) for termination rights and specific sales conditions.
- Monitor future filings to track the actual volume of shares sold under the ATM program and the resulting cash inflow.